DEAR BRUCE: I own a condo (where I reside), and the mortgage is $88,000. I have invested in another condo, for which I paid $99,900, and I am renting for $750 a month. I want to buy a third unit in the same association for $129,000 and may possibly break even if I charge $1,200 for rent. I have good reason to believe they all will increase in price and rent over the next four years, when I plan to retire. I am trying to gain passive income for when I retire. Do you think this is a smart idea? I have other investments in 40l(k) and mutual funds, totaling $256,000. — A.S., via e-mail

DEAR BRUCE: I own a condo (where I reside), and the mortgage is $88,000. I have invested in another condo, for which I paid $99,900, and I am renting for $750 a month. I want to buy a third unit in the same association for $129,000 and may possibly break even if I charge $1,200 for rent. I have good reason to believe they all will increase in price and rent over the next four years, when I plan to retire. I am trying to gain passive income for when I retire. Do you think this is a smart idea? I have other investments in 40l(k) and mutual funds, totaling $256,000. — A.S., via e-mail

DEAR A.S.: You've heard the old saw about "where angels fear to tread." At this intersection in our history, investing in condos is a treacherous proposition. You mentioned that you paid $100,000 for a condo and you're only getting three-quarters of 1 percent a month, plus you have condo fees. I'm not sure you're breaking even on that one. Now you want to pay an extra 30 percent for this other condo and once again, you're renting it for less than 1 percent a month, which I feel is obligatory. You will also have condo fees. Furthermore, you may be right that they may increase in price over the next four years, but they also may still take a tumble, as condos have done all over the country. You haven't told me where you live, but unless you're in a market that is extremely atypical, I'd walk softly on this idea.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns